Credit card products have become so universally well known and ubiquitous that they have fundamentally changed the manner in which financial transactions and dealings are viewed and conducted in society today. Credit card products are most commonly represented by plastic card-like members that are offered and provided to customers through credit card issuers (such as banks and other financial institutions.) With a credit card, an authorized customer or cardholder is capable of purchasing services and/or merchandise without an immediate, direct exchange of cash. With each purchase, the cardholder incurs debt to their credit card account, which the cardholder may thereafter pay upon receipt of a periodic, for example, monthly statement. In most cases, the cardholder will have the option to either fully pay the outstanding balance or, as a matter of necessity or choice, defer at least a portion of the balance for later payment with accompanying interest or finance charges for the period during which payment of the outstanding debt is deferred (also referred to as a revolving charge credit line.)
In order to attract or retain customers, credit card issuers may offer credit card products that are associated with one or more incentives. These incentives may include points that are accumulated based on purchases made with these types of credit card products. A cardholder may use the accumulated points to receive goods and/or services provided by the credit card issuer and/or third party vendors. These incentives may also include a cash back incentive in which a certain percentage of the customers' purchases are returned to the customers in the form of cash, check, and/or credit on a credit card statement. For example, credit issuers may provide 1% cash back to the customers for all purchases made using the credit card products. Additionally, these incentives may provide a tiered incentive program that provides additional points or cash back for purchases made at vendors designated by or having established relationships with the credit card issuer. For instance, credit card issuers may offer credit card products associated with refueling stations for vehicles, such as a franchised gas station. When a cardholder makes purchases at a designated franchised gas station, the credit card issuer may credit the cardholder's account with a certain number of additional points or cash back, such as 5% of the total purchases.
Accordingly, such credit card products provide more points or incentives to the cardholder as the cardholder purchases more qualified goods or services. However, several drawbacks exist with these conventional approaches. For example, rewards cards provide tiered programs for points or incentives to participating customers, but only with vendors selected by the credit card issuer. In other words, customers can receive a higher number of points or other incentives, such as 5% cash back, only by making purchases at vendors that have been designated by or partnered with the credit card issuer. Many times, customers are not frequent shoppers at these pre-selected vendors and/or lose interest in the incentives and, thus, never fully realize the benefits. Further, customers may already have one or more preferred merchants or vendors for particular sets of goods and services and may not be interested in switching merchants.
Another problem that exists is that financial institutions have had difficulties in providing incentives or forging relationships with merchants in specific markets or smaller sized merchants or retailers, such as traditional “mom and pop” shops or specialty stores where fewer purchases are made by customers as a whole. The same is also true for other types of merchants or vendors, including on-line merchants and service providers, which have grown in popularity with customers but have not traditionally partnered or entered into relationships with financial institutions. These factors make it difficult for financial institutions, such as credit card issuers, to offer traditional incentives, including reward points for purchases made at these and other types of merchants and service providers. This leads to missed opportunities and lost benefits to individual customers who are frequent shoppers at these merchants.
In view of the foregoing, a need exists for improved systems and methods for providing incentives to customers, including incentives to attract or retain customers. There is also a need for such systems and methods that can be applied to a wider array of merchants, such as on-line merchants, local retailers, and specialty stores. Additionally, incentives are needed that do not require customers to make purchases only at merchants or vendors pre-selected by the financial institution to qualify or receive the full benefit of the promoted incentive or reward.